Association of Financial Advisers CEO, Brad Fox, has backed the call for higher education standards for financial advisers, but does not believe current practitioners need a university degree.
Speaking at The Value Alliance’s New Year event in Sydney last week, Mr Fox said it was not appropriate for existing advisers to be expected to go back to university and get a degree in order to continue to be able to practice. Instead, Mr Fox believes a professional designation, such as the AFA’s FChFP or a Masters of Financial Planning is a more achievable option for those already working as advisers.
“We already have a shortage of quality financial advisers. As the demand for advice continues to grow – as more and more Baby Boomers head towards retirement – and as older advisers themselves exit the market, we will see this gap widen,” Mr Fox said.
“Any time you take an adviser away from their day to day job of helping Australians prepare for their future you add to this problem. Advisers who are sitting in a university classroom are missing out on helping potential new clients. That means less Australians getting access to quality advice – that seems counter to what the education reforms are trying to achieve.”
…we will need time to rebuild our reputation
Mr Fox said he believed there was a strong future for financial advisers, but that it would take time to overcome the sector’s perception problem.
“Great advice practices are flourishing despite the current issues,” he said. “The future is bright, the demand for advice is through the roof – but we will need time to rebuild our reputation.”
To combat the negative commentary about advice, Mr Fox encouraged all advisers to “do what they do best” and share more stories about the value of advice.
“If 1000 advisers each spoke to 1000 people about a good claims story, then through the multiplication effect of word of mouth, those stories would reach well over 1 million people. That’s just one way we can spread the real story of advice.”
I believe that the Masters of Financial Planning is a university degree. Most of the time people who advocate less or no formal educational qualifications framework and work around remedies hinders the effort to make the Financial Advice as a profession.
We should stick with and offer every financial planner a reasonable timeframe to obtain higher qualifications, no exceptions. This is the only way to gain respect back and make financial planning as a trusted profession.
Ha! Poor Brad Fox got caught out there…..um, a Masters of Financial Planning is definitely a degree Brad! Also, these days you do not need to abandon the office and attend University classes……there are now Distance Learning, Brad!!!
I think as professionals, we can’t afford to not to keep learning. Lets face it, a huge amount of Advisers just rely on the CPD points for their ongoing learning (which are usually done in a flurry towards the end of the financial year).
At the tender age of 56, I’ve just finished a Masters in Commerce (Financial Planning) via university distance learning over the last few years and it was enjoyable and the subjects I chose definitely gave me a deeper insight from economics to marketing strategies, The general public is much more savvy these days, and we owe it to our clients to be up to scratch on all areas of finance. Glossing over these areas is not going to cut it anymore if we are going to position ourselves as professionals.
“Advisers who are sitting in a university classroom are missing out on helping potential new clients”
Well I guess the same could be said of Doctors and Engineers or any other vocation that has acheived the status of ‘profession’ for that matter. Afterall, its those yet to practice that pose the biggest risk to clients and its those future professionals, not current practioners that lack the trust of the public.
Can you spot the similarity between all 3 points above? They all use Mr Fox’s logic and they are all moronic. All you need to say Mr Fox was that “the industry needs to ensure that current practioners have the same level of formal education as new entrants, that doesnt nessesarily mean doing the same program of study. There needs to be alternative pathways for existing, experienced practioners” that would have been sensible, instead you emark on a trip of member back patting and market fluff that would make the real estate industry blush.
Brad Fox as CEO of AFA you should be leading from the front with increasing Advisers education. Advisers can study at night like the rest of those people who earn their qualifications whilst working full time.
Agree that existing advisers should not be required to complete a university degree – the experience gained at the coalface over years of managing change and dealing with clients has been a classroom in itself.
However, with increasing complexity of legislation and products I do believe an appropriate degree qualification for new entrants is at least desirable, if not mandatory.
Has everyone gone insane. Do you really expect a university graduate to go out at night into people’s homes and businesses to sell them Life Insurance. Life insurance will always be sold and not bought…it’s emotional not logical. You don’t have to sell someone on the fact that they MUST submit a Tax Return each year. Can everyone wake up please and start applying some common sense.
Just started my journey towards getting my degree. I feel a little jealous of those CFPs handed out years ago to those without a degree though.
Firstly, Brad, please do your homework, you have just embarrassed yourself an MBA is a degree, as a matter of fact, it is designated higher. I feel quite strongly about this having, just recently, completed my own MBA.
Secondly, when are they going to review, and maybe rescind, the CFP designation handed out to accountants in the 90s who completed DFP1 and were granted full CFP? THIS IS A JOKE. I have come across many of them who have not the slightest idea about the process yet fly the banner of CFP. However, I must say I know a great many good accountants who are very able advisers.
Holding a degree doesn’t automatically mean your smart or able to advise Clients any better than an Adviser that does not hold a degree. In fact main stream Advisers that have many years of experience in dealing with every day Clients needs and objectives can relate more accurately to Clients needs than an Adviser whom has spent the last ten years in college & or university ticking boxes and reading ten year old out dated journals on how to invest and greet Clients. There are plenty of Intellectual Advises that do have double degrees and a MBA that can not communicate with Clients and find negotiating a major hurdle. So when you raise the bar on education requirements, we must have the most important requirement “EXPERIENCE” as a major requirement. instead of 5 years in University, maybe 5 years financial experience and obtaining levels of competency during the process. Its not that hard.
Here’s a light hearted article on the correlation between the number of Harvard Graduates on Wall Street and falls in the share market. Maybe there’s a little more than just acquiring theory.
http://www.slate.com/articles/business/moneybox/2004/11/why_harvard_is_bad_for_wall_street.html
The collective attack of our good character (as participants in this profession) should have us up in arms.
Why does no-one advocate more stringent policing of our activities instead of putting barriers in place to even getting started.
How about voice recorded Transactions/Product Discussions? Fact Finding?
We should be advocating kicking the dodgy bastards amongst us out. Not bending over backwards only to leave them all here. Degree or no degree, the shonks will continue to operate.
I’m pretty sure the are Doctors, Accountants and Engineers out there who do the wrong thing……..oh no hang on, they’ve got a degree.
We should be getting real and pushing for bigger punishments, better monitoring and standardised transaction sign-offs by the client:
Do you understand that you may lose money by doing this? YES/NO.
Have you had the concept of volatility and how risk applies to you explained in a manner you understood fully? YES/NO
etc etc etc
Then we could lodge these with ASIC, who in turn contact and offer the client the ability to refute the answers during a cooling off period……. The client has effectively agreed they were told, understood and acknowledged the risks and been given a chance to rescind their agreement to the questions when not under the direct gaze of their evil shonky planner. Pretty hard to argue with I reckon. Also a hell of a lot less hassle than the crap we are wading through now.
If we had a few more things here and there that PREVENTED the complaints and made the adviser accountable, it’d go a long way to providing assurance to a client.
By the way – they just were random thoughts. Please don’t write down 800 reasons why they won’t work…..
*****Current Approach******
Everyone is speeding on the road? We better lower the speed limit!!
*****My Preferred Approach*****
Lets hire a few extra police and put in a speed camera or two to catch the bad people so the good ones aren’t disadvantaged
I do not support Brad’s comments. I am sick to death of all the negative press we get as advisers and then you have the head of one of the associations making these comments in public – and then using an example of a life insurance claim to spread the message of what we do. Seriously?
Let’s get real – people can go on about 20 or 30 years experience beats study, and I agree with that, but nothing beats experience plus study. Nothing! Some people use experience as a shield for incompetence. For some it is the case that they have been doing the same thing (good or bad) over and over for 20 or 30 years. They wouldn’t know if there are areas that need improving.
Wake up financial planning industry. The Australian public thinks we are a bunch of shonks and we need to do things to address this problem. Go back and study…you might actually learn something.
You are wrong! We’re not a bunch of shonks – we are “unscrupulous” and “cowboys and shysters” just ask our esteemed Politicians, Senator’s Lambie and O’Neill.
I think Brad Fox and many others are missing the point. The issue is not so much the level of education that advisers need, but the level of education the public expects. Rightly or wrongly, most members of the general public expect financial advisers should have a degree, and in the current climate we have to acknowledge that and quickly work towards it. I don’t think planners without a degree should be prevented from practising, but surely there comes a time when such planners shouldn’t be able to continue as members of a professional association? As for the FPA, they actually allow planners with very minimal education to continue holding “the highest professional designation” of CFP. That’s just a joke.
I am 80 years old and have been in the accounting and advice business for over 40 years. I have many clients that I still look after and they do not seek advice from anyone else despite my age because they trust me to tell the truth and if I don’t know an answer I will seek appropriate advice. I do not need a university degree to do that. I do not want anymore clients as the existing ones take up my advisory time. They have got to be kidding if they expect me to get a university degree at my age to just look after the many clients that I have serviced for many years. Also you do not need a university degree to write risk business. That type of business has to be sold. A university degree does nothing to convince a client that there is a possibility that they can die even when they are not old. A university degree will not help a client purchase disability income insurance when we all know that the majority of younger people are convinced that it will never happen to them but only to other people. I am too young to retire but a compulsory university degree will force me to give up on the servicing of my existing clients and that is something that I treasure. A university degree does not engender trust even though it is a status symbol. Instead of placing onerous requirements on people who have never had a complaint against them why not just get rid of the “cowboys”
Hey Peter, where is the LIKE button so we can agree without commenting here please 🙂 There is really nothing further that one could add to Mr Davis’ opinion here.
Cheers
We have two staff members on board. One has just graduated with a Batchelor of Commerce majoring in Accounting and Financial Planning after 3 years of study, the other has the 4 unit Kaplan Diploma of Financial planning. Now assuming they were both ready (which they are not at the moment) guess which one is currently able to be a financial planner? Yep, the Diploma.
Apparently the degree course does not meet all the requirements, and our University Graduate now has to do a Diploma if she wants to become a financial planner.
No one has mentioned the, what appears to me, obvious conflicts of interest happening here. Lobby for more education, make claims that the public are crying out for it – which is complete bollocks – and then supply the expensive courses that they claim will solve the problem. Its happened before. I know many ‘professionals’ in their 50’s or 60’s who graduated with the necessary qualifications to practice. Many of the required qualifications for those professions are a lot higher for a new entrant to that profession today. Are they being made to return to Uni? Of course not. This also makes a mockery of our supposed CPD, if, as suggested now, our constant, on-going education, training and industry updating is not worth squat. I am 52, this is my 30th year in the industry. I completed a certificate course in Financial Markets in my early years, which took two years to complete. Several years later, I completed the Graduate Diploma In FP, which also took 2 years and was not cheap. This was at a time I was raising a young family. I completed Levels 1 & 2 of the Lifewriters courses and have completed a Cert 4 in lending. Add to this a thousand one off training days, mini courses and the like. I am now being told that all of that may provide some credit towards certain subjects of these new courses being sold. To have someone now tell me that I need to go back to Uni is an insult to my intelligence and ethics and they can jam it where the sun don’t shine! We are constantly being bombarded with actions that just make you want to leave the industry, which is obviously someones agenda. Why are groups like the FPA and AFA calling themselves professional bodies when according to their own statements now, the majority of their members are not ‘professional’? And what is it that these courses hold that they are not telling us now? If there is information we should know, then why aren’t they sharing it with us?
So, what Brad doesn’t mention is whether HE comes from an informed background. is it Brad Fox Bachelor of Bugger All or has he done the study himself ? I suspect the former. Experience sadly, does no equate to competence. Indeed, the foundation elements of a bachelor degree I use almost every day. Law, Economics and finance. ASIC’s crackdown on education will deliver the single most significant reform in the history of planning.- Bring on the central supervised exam Peter Kell – the sooner the better and then we will see how many of these blow-hards survive a real test on the knowledge they claim they have !
Everyone is entitled to their opinion but some of the comments expressed on this topic are rude and unhelpful in the discussion and they make some of you appear conceited, arrogant and unprofessional. I certainly hope that is not a true reflection of your character?
Someone once said to me “‘knowledge builds up – pride and arrogance ‘puff up'” I think that’s worth baring in mind on this topic.
Ultimately there are a variety of advisers running ethical compliant practices from a range of backgrounds. It makes sense that standards have to continue to keep up with changes in the environment, but its also reasonable that experience and prior learning are taken into account.
Somehow that mix needs to strike the right balance. I think that is the point Brad Fox was making.
Those of you who have jumped on the comments to beat your chests about how great you are and how bad everyone else is need to become constructive advocates for what you believe and have done – not belittle everyone else who for whatever reason chose a different path.
^^ well said No need to be rude”. By the way, how many of those Storm advisers had uni degrees? How many of the bank employees have one?
A degree does not an honest or competent person make.
Maybe the upshot to all of this is that as ‘professionals’ we will no longer have the requirement to provide a 60 page SOA to our clients. Of course I’m dreaming…
Will further education (degrees, etc) make a person more honest, in the areas of finance they advise on?
I mention ‘honest’, as most of the cases which have prompted this discussion, and potential legislation, were more about honesty, or conflict of interest, than about knowledge.
I feel everyone has made their points very well, although, I believe we are missing the point somewhat.
Maybe, anyone who offers advice, needs to be psych tested, to determine their propensity to being dishonest.
Obviously, ongoing education, needs to be undertaken by anyone offering advice, in any area, and not just financial advice.
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